Western Union Telegraph Co. v. Poston

Background

A person who sent an intrastate telegram that arrived late sued the private telegraph company for damages after a South Carolina trial court awarded recovery. At the time of the delay, the federal government had taken possession and control of telegraph systems during the war, the Postmaster General was operating them, and the Postmaster General had an October 9, 1918 contract with the company about compensation and payment of judgments. The state courts treated the suit against the company as effectively against the Government and allowed the claim to proceed.

Reasoning

The key question was whether the private company could be held liable while the Government had taken over and was operating the telegraph system. The Court relied on the joint resolution of Congress that authorized the President to take possession and control for the duration of the war, and on the President’s proclamation that he had done so. The Court explained that although company officers continued to operate the equipment in the company’s name, that did not make the company the Government’s operating agent. The compensation contract merely required the Government to save the owner harmless and to pay judgments, but that indemnity did not create private liability. The opinion compared the situation to prior federal control of railroads, where private companies were likewise not held liable when the Government operated their property.

Real world impact

The ruling reverses the state-court judgment and means private telegraph companies cannot be held responsible in state court for losses that occur while the Government operates the system. People who suffer losses from such wartime operations must look to federal remedies or to Congress to provide a new private remedy, because the Court will not create one here.